The Interagency Suspension and Debarment Committee (ISDC) recently released its annual report to Congress regarding suspension and debarment across the federal government in FY 2019. The report serves as a yearly reminder that while selling to the federal government – the largest purchaser of goods and services in the world – may present tremendous opportunities, it is not without risk or obligation. As Justice Holmes stated in Rock Island, Arkansas & Louisiana R.R. Co. v. United States, 254 U.S. 141, 143 (1920), people “must turn square corners when they deal with the Government.” Those that don’t may lose access to the federal marketplace altogether, a loss that can prove fatal to companies that are heavily reliant on government contracts or grants.
Overview of ISDC Report
The ISDC report, which is available here, shows that while the total number of actions nearly doubled over the last decade, the number of proposed debarments and debarments continues its steady decline that began in FY 2014. While this might suggest that agencies are utilizing this administrative tool less frequently, a closer analysis of the report shows that is not the case.
In fact, the number of referrals to suspending and debarring officials (SDOs), as well as the number of suspensions, increased significantly from FY 2018 to FY 2019: referrals were up from 2,441 to 2,806 and suspensions increased from 480 to 722, due in large part to increased activity by the Air Force, the EPA, and the Department of Labor. This uptick is likely the result of a multi-year effort to educate contracting officials about the importance of referring contractors to SDOs when their conduct indicates either serious poor performance or a lack of business honesty or integrity such that excluding them from the federal marketplace to protect the government from potential harm might be appropriate.